Climate policy-making in today's world is complex. Transaction and enforcement costs are significant and affect the effectiveness and efficiency of policy instruments. Developments in related policy fields, such as energy policy, may influence the performance of climate policy instruments, while path dependency could lead to a lock-in on carbon intensive technological paths and hinder the penetration of low carbon technologies. Furthermore, modern economies do not operate in autarky. European climate policies may impact upon the competitiveness of European producers, which, in turn, may affect both the policies' environmental effectiveness and economic efficiency. Issues of equity are also likely to affect the political feasibility of a particular policy instrument. Opting for solely economically first-best solutions can easily hamper action and stall progress. All these considerations highlight the need for carefully considered, realistic policy design.

This workshop discusses how climate and energy policies interact and how policy portfolios which comprehensively address these complexities need to be designed. The workshop presents and discusses new insights from research conducted in ENTRACTE, a research project funded under the 7th Framework Programme of the European Union.